By Melissa Patrick
Kentucky Health News
Rural health care and related jobs will take a huge hit if Congress rolls back the Patient Protection and Affordable Care Act as Republicans have proposed, says an analysis from the Chartis Center for Rural Health, part of a national health-care advisory firm.
The report says 41 percent of the nation's 2,200 rural hospitals already lose money and any revenue loss "will further weaken their tenuous financial position." It estimates that the proposed cuts to Medicaid would push the percentage of rural hospitals operating in the red up to 48 percent. Further, it says hospitals will be forced to cut employees and costs to adjust to the decreasing revenue.
Nationally, the analysis of the House and Senate bills estimates between 34,000 and 37,000 rural health-care and related jobs would be lost as a result. In Kentucky, those job losses are estimated to be between 2,278 and 2,461.
It also estimates that nationally, proposed cuts to Medicaid will result in an annual $1.4 billion loss of revenue to rural health providers if the House bill is enacted, and an annual $1.3 billion loss under the Senate bill. In Kentucky, the projections say rural hospitals would lose $90 million annually if the House bill is enacted, and an annual $83 million loss under the Senate bill.
Further, the report breaks down the projected revenue and job losses for the 66 rural Kentucky hospitals analyzed in the study.
It found that Saint Joseph London is projected to have the most job losses, losing between 113 and 122 jobs; followed by Clark Regional Medical Center in Winchester, projected to lose between 107 and 116 health related jobs. TJ Samson Community Hospital in Glasgow is projected to lose the most revenue under both bills -- around $5 million annually-- and is estimated to lose between 98 and 106 health related jobs.
The report notes that states such as Kentucky, which chose to expand Medicaid under the ACA, would see cuts nearly double those of states that didn't expand Medicaid; and that states with larger Medicaid programs and larger rural populations would see a greater impact from the proposed cuts. Kentucky falls into both categories.
Kentucky is one of the 31 states that expanded Medicaid under Obamacare to those who earn up to 138 percent of the federal poverty line. Around 470,000 Kentuckians gained health insurance through the expansion. About 1.4 million people are covered by Medicaid in Kentucky.
Most of the Medicaid cuts would come from phasing out the extra funding for the Medicaid expansion. Under the ACA, the federal government pays 95 percent of the expansion funding this year,rising decreasing in annual steps to the ACA's 90 percent limit in 2020. The House bill phases this out in 2020; the Senate bill keeps it until 2021, but then cuts it back to the traditional Medicaid level over the following three years.
The federal government pays an average of 57 percent of traditional Medicaid costs, but the rates vary between 50 and 75 percent, with poor states getting a higher percentage. The federal government pays 70 percent of the costs for traditional Medicaid in Kentucky.
Long-term cuts to Medicaid would come from a change in how traditional Medicaid funding is calculated. Both bills would move funding to a formula that is based on population instead of reimbursing a state a percentage of what it spends, based on a formula that gives poorer states more money. The Senate bill could change on that point to get the votes needed for passage.
"Both pieces of legislation make significant cuts to Medicaid, which will have far reaching implications for the neediest communities and the providers who serve them," Michael Topchik, national leader for the Chartis center and senior vice president at iVantage Health Analytics, said in a news release.
The Congressional Budget Office estimates that by 2026, Medicaid spending under the Senate bill would be 26 percent less than projected under current law; the House bill would reduce it by 24 percent.
Kentucky Health News
Rural health care and related jobs will take a huge hit if Congress rolls back the Patient Protection and Affordable Care Act as Republicans have proposed, says an analysis from the Chartis Center for Rural Health, part of a national health-care advisory firm.
The report says 41 percent of the nation's 2,200 rural hospitals already lose money and any revenue loss "will further weaken their tenuous financial position." It estimates that the proposed cuts to Medicaid would push the percentage of rural hospitals operating in the red up to 48 percent. Further, it says hospitals will be forced to cut employees and costs to adjust to the decreasing revenue.
Nationally, the analysis of the House and Senate bills estimates between 34,000 and 37,000 rural health-care and related jobs would be lost as a result. In Kentucky, those job losses are estimated to be between 2,278 and 2,461.
It also estimates that nationally, proposed cuts to Medicaid will result in an annual $1.4 billion loss of revenue to rural health providers if the House bill is enacted, and an annual $1.3 billion loss under the Senate bill. In Kentucky, the projections say rural hospitals would lose $90 million annually if the House bill is enacted, and an annual $83 million loss under the Senate bill.
Further, the report breaks down the projected revenue and job losses for the 66 rural Kentucky hospitals analyzed in the study.
It found that Saint Joseph London is projected to have the most job losses, losing between 113 and 122 jobs; followed by Clark Regional Medical Center in Winchester, projected to lose between 107 and 116 health related jobs. TJ Samson Community Hospital in Glasgow is projected to lose the most revenue under both bills -- around $5 million annually-- and is estimated to lose between 98 and 106 health related jobs.
The report notes that states such as Kentucky, which chose to expand Medicaid under the ACA, would see cuts nearly double those of states that didn't expand Medicaid; and that states with larger Medicaid programs and larger rural populations would see a greater impact from the proposed cuts. Kentucky falls into both categories.
Kentucky is one of the 31 states that expanded Medicaid under Obamacare to those who earn up to 138 percent of the federal poverty line. Around 470,000 Kentuckians gained health insurance through the expansion. About 1.4 million people are covered by Medicaid in Kentucky.
Most of the Medicaid cuts would come from phasing out the extra funding for the Medicaid expansion. Under the ACA, the federal government pays 95 percent of the expansion funding this year,
The federal government pays an average of 57 percent of traditional Medicaid costs, but the rates vary between 50 and 75 percent, with poor states getting a higher percentage. The federal government pays 70 percent of the costs for traditional Medicaid in Kentucky.
Long-term cuts to Medicaid would come from a change in how traditional Medicaid funding is calculated. Both bills would move funding to a formula that is based on population instead of reimbursing a state a percentage of what it spends, based on a formula that gives poorer states more money. The Senate bill could change on that point to get the votes needed for passage.
"Both pieces of legislation make significant cuts to Medicaid, which will have far reaching implications for the neediest communities and the providers who serve them," Michael Topchik, national leader for the Chartis center and senior vice president at iVantage Health Analytics, said in a news release.
The Congressional Budget Office estimates that by 2026, Medicaid spending under the Senate bill would be 26 percent less than projected under current law; the House bill would reduce it by 24 percent.
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